Calif. Toxin Law Warns Consumers, But Can Burden Businesses

All over California, signs in restaurants, parking garages and other businesses warn that you could be exposed to chemicals that can cause cancer.

The disclosure is mandated by 1986 state law. If a company fails to warn consumers, it can be sued.

But a lot has changed since the law was passed: The list of toxic chemicals is longer and the lawsuits are more prolific. In October, Gov. Jerry Brown signed an amendment to ease the burden on businesses.

David Roe, one of the original architects of the law, says the intention was to fix a loophole in federal environmental regulations.

"The places where you see Prop 65 warnings are places like gas stations ... [and] hotel rooms where smoking is permitted," he says. "It is important to be warned about it. It doesn't mean don't drink coffee. It means, is this a risk you want to take among life's many other risks?"

He says the California law has been a huge success, and that consumers in the state are safer today than they ever have been. He says thousands of products have had toxic chemicals taken out of them, though you don't always hear about it.

"Because most of Proposition 65's effect is companies deciding [they] would rather switch than fess up about exposing people to toxic chemicals," Roe says.

A Changing World

In the quarter-century since Proposition 65 passed, the number of toxic chemicals it covers has ballooned from dozens to hundreds.

Eric Biber, a law professor at the University of California, Berkeley, says no one realized how common carcinogens are. Today, the list of potentially toxic chemicals is so long that it's confusing to businesses that are trying to comply with the law, and that's only half the problem.

"The law uses a citizen-suit provision in which anyone can sue a company for violating the law," Biber says. "The problem is it does create an incentive for more and more people to sue."

Biber says there has been an increase in these lawsuits over the years, with some lawyers targeting small businesses for everyday exposures, like alcohol or cigarette smoke outside a bar. They use the suit to get some money, but do not actually produce reductions in toxic exposures.

Proposition 65 suits have helped make California the most litigious state in the union, Biber says,and those lawsuits disproportionately affect small businesses.

"Businesses, mostly small businesses, paid about $22.5 million in Prop 65 settlements in 2012 alone," says John Kabateck, a spokesman for the National Federation for Independent Businesses. "That's up $11.8 million since 2007, and the real problem is that the largest proportion of these settlement funds have actually gone in the pockets of plaintiff's attorneys."

By some estimates, more than half of Proposition 65 settlement money has gone to lawyers.

The Burden On Business

For virtually all environmental law in the U.S., it's the government's responsibility to go after businesses or products that are hurting consumers. For clean water laws, the Environmental Protection Agency or state regulators stop factories from dumping toxic pollution into a river.

But Proposition 65 doesn't work like that. The state just puts out a list of chemicals that might hurt you. The responsibility is on businesses to warn consumers, and on consumers to sue if they don't.

Biber says California has been like a lab, testing a new approach to protect consumers.

"That's one of the things that was innovative about Prop 65 when it was enacted in the mid-1980s, is it flipped that burden of proof," the law professor says. "I think you end up with companies being more risk averse about toxic chemical exposure in products, [but] that can also mean it can be more costly."

That's one reason, Biber says, the notices are posted in so many place. A lot of small businesses, he says, would rather put up a notice — even if they're not sure they have any toxic chemicals — than fight it out in court.

In the amendment to the law passed in 2013, small business owners faced with a lawsuit now have a two-week grace period to comply.

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Transcript

ARUN RATH, HOST:

Walk into just about any coffee shop in California and you'll probably see a sign warning you that you could get cancer from chemicals in the store's products. At the top, the signs say Proposition 65 warning. You'll find similar signs in any number of places: parking garages, restaurants, apartment buildings. We went into a coffee shop in Los Angeles to ask people what they make of the signs.

STEVE HANKINS: I think I've just become so accustomed to them that I just don't really pay attention to them. I guess if I get cancer, I'll get cancer.

AMNEETA CHATHA: I have not seen any signs for Prop 65. It's - I feel oblivious.

ALANA SERFATI: When we first looked at our apartment that we now live in, we saw a bunch of signs plastered all over, and it definitely scared us a little bit. But did it deter me from moving into the apartment? No. And does it deter me from going into buildings where I see it on the outside? No. It's just one of those things you see on the wall.

RATH: That was Steve Hankins, Amneeta Chatha and Alana Serfati. The warnings are there to comply with a 1986 California law that requires companies to disclose if their products or facilities use chemicals that could potentially cause cancer or reproductive illness. And if a company fails to warn consumers, well, they can be sued.

David Roe was one of the original architects of the law.

DAVID ROE: The places where you see Prop 65 warnings tend to be things like gas stations, hotel lobbies where smoking is permitted, hotel rooms where smoking is permitted, things like that. It is important to be warned about it. It doesn't mean don't drink coffee. It means, is this a risk that you want to take among life's many other risks?

RATH: Roe says when it was drafted in the early '80s, the intention of the law was to fix what many saw as a loophole in federal environmental regulations. The EPA only regulates chemicals when it knows exactly how much of a toxic chemical is too much. Finding that out requires an in-depth study, and that requires funding.

ROE: In other words, if you could slow government down, then you could keep these laws from actually having an effect even though they were on the books.

RATH: Roe says the California law has been a huge success. Consumers in the state are safer today than they have ever been.

ROE: Thousands of products have had toxic chemicals taken out of them, but you don't hear about it because most of Proposition 65's effect is companies deciding I would rather switch than fess up about exposing people to toxic chemicals.

RATH: But in the quarter-century since Prop 65 passed, a lot has changed. To start, the number of toxic chemicals it covers has ballooned from dozens to hundreds.

Eric Biber is a professor of law at U.C. Berkeley. He says no one realized how common carcinogens are. Today, the list of potentially toxic chemicals is so long that it's confusing to businesses who are trying to comply with the law, and that's only half the problem.

ERIC BIBER: The law uses a citizen-suit provision in which anyone can sue a company that allegedly is violating the law. And then you can get some money if you're successful in the lawsuit. The problem with that second solution was that it does create an incentive for more and more people to sue. And we've seen an increase in those lawsuits over the years. And arguably, it's become a problem where you have lawyers targeting small businesses for some of these common everyday exposures like alcoholic beverages or cigarette smoke outside of a bar and using that to get some money but not actually producing useful information or useful reductions in toxic exposures.

RATH: Prop 65 suits have helped make California the most litigious state in the union. And as Biber pointed out, those lawsuits disproportionately affect small businesses.

John Kabateck is a spokesman for the National Federation for Independent Businesses.

JOHN KABATECK: Businesses, mostly small businesses, paid about $22.5 million in Prop 65 settlements in 2012 alone. That's up $11.8 million since 2007, and the real problem here is the largest proportion of these settlement funds have actually gone in the pockets of plaintiff's attorneys.

RATH: By some estimates, more than half of Proposition 65 settlement money has gone to lawyers.

For virtually all environmental law in the U.S., it's the government's responsibility to go after businesses or products that are hurting consumers. Think of clean water laws. It's the EPA or state regulators that say, hey, hold on. This factory is dumping toxic pollution into a river. That's dangerous.

But Prop 65 doesn't work like that. The state just puts out a list of chemicals that might hurt you. The responsibility is on businesses to warn consumers, and on consumers to sue if they don't.

Eric Biber says California has been like a lab, testing a new approach to protect consumers.

BIBER: That's one of the things that was innovative about Prop 65 when it was enacted in the mid-1980s is it flipped that burden of proof.

RATH: Is that approach better? Are Californians better protected?

BIBER: I think you end up with companies being more risk averse about toxic chemical exposure in products. That can also mean that it can be more costly. And that's one of the reasons you have this notice problem is what happens with a lot of small businesses is rather than try to fight this out in court, they just put the notice up. Even if they're not sure if there are any toxic chemicals in their product, in their property, it's just easier to put the notice up rather than fight things out in court.

RATH: In 2013, California passed an amendment to Proposition 65 that they hope will ease the burden on businesses. Small business owners faced with a lawsuit now have a two-week grace period to post the appropriate warnings and have the suit thrown out.

In the end, which approach is better, putting the burden of consumer protection on businesses or on the government, has to boil down to a matter of perspective or political philosophy. Transcript provided by NPR, Copyright NPR.